Credit cardholders finance RD$135 for every RD$100 they consume

SANTO DOMINGO. During 2013, for each RD$100 of consumption with a credit card, the cardholders financed RD$135 because of the high interest rates that the issuing banks charge for this financial product.

The interest rates for credit cards reached 79.2% at the end of last year, when the Superintendent of Banks announced a reduction of the rates which in 2015 will reach 54% APR.

According to the statistics of the Central Bank, in 2013 the cardholders consumed a total of RD$14,411 billion and paid a total of RD$19,536 billion including financing charges.

In the face of these elevated numbers, the Diario Libre went into the streets to discover the opinion of the people with regard to the how much they know about credit cards. The reporters learned that some persons finance their consumption because of a lack of knowledge and others because they do not control their purchases.

In this sense, Australia Santos, a woman who was approached in the parking lot of a commercial establishment in the capital, said: “I stopped using the cards, because I always spent more than I should have spent. I am a compulsive shopper.” And a School Police agent said that he has a card but he does not know when the cutoff date is and he did not know how much he pays in interest.

On the other hand, Edwin Corporan said that the cards are a good instrument for paying bills, if you know how to use them. “In order to know how to handle the cards, you have to know the cutoff date and how much time you have in order to pay,” he pointed out.

“They work fine for me,” was the answer from young Belkis Orozco, when she was asked what her opinion was regarding credit cards as she came out of a bank.

She said that what people have to do is pay on time, and know what your debt limits are.

“Cards are a robbery because of the amount of interest they charge,” said Ricardo Mendez, who was consulted when he was walking around the Novocentro commercial plaza. However, he did say that they are an excellent way to pay, since he buys things on the Internet and pays with his card. He added that the trick is to know how to handle yourself.

Regarding this problem, the Superintendent of Banks reported that they have developed a program of Financial Education with the aim of strengthening the knowledge of the cardholders on the handling of their personal finances.

Superintendent of Banks

Last October, the Superintendent of Banks, Rafael Camilo, said by means of an agreement with the ABA, that starting on 1 June 2014 they will apply a monthly interest on credit cards of 5.5%, which is equal to a savings of RD$5.1 billion. At the same time, from the first of January 2015, the financial entities will apply a monthly interest rate on credit cards of 4.5% which will save cardholders RD%6.8 billion.